And so the comedy circle is complete yet again after none other than former White House budget chief Peter Orszag throws cold water in the face of the White House, the Treasury and everyone else who has so far been so stupid to continue to deflect blame for America's horrendous fiscal situation purely on S&P and its "colossal $2 trillion mistake." Because if the guy who up until a year ago personally came up with the White House's voodoo numbers is telling you they are full of shit (the numbers, not the White House), perhaps it does put the administration's claim that it is all S&P excel spreadsheet skills that are at fault, in a slightly different light.

I'm not going to praise the GOP at all because they don't deserve it . . . but I will say the Democrat BS about "balanced approach" is cowardly hypocrisy.

THEY HAD FULL CONTROL WITH OVERWHELMING MAJORITY, INCLUDING FILIBUSTER PROOF FOR ABOUT 10 MONTHS AND NOT ONCE DID THEY PASS A LAW TO RAISE TAXES!!!

They had every chance to get their "balance". They knew damn well it would get them voted out so they said no. Now they want to hide behind a package the GOP votes for too in order to immunize themselves from tax raising campaign ads.

Cowardice!

They had EVERY OPPORTUNITY to raise taxes, and even end the demonized Bush Tax Cuts for Two F*cking Years and didn't raise a finger to do it.

ORSZAG is a pretty sharp guy. I listened to him long before he became a mouthpiece for the Administration. It was pretty obvious to those who knew his stance that it was no surprise that he didn't last long in DC. He is a pretty straight shooter, so the cranked-up stuff he was obliged to spew drove him away. I'll say that David Walker held in there a little longer before moving on. It's a wonder Walker didn't meet with an "untimely demise".

I watched that special until after Bill Gross was done talking. He seemed to have more insight then any of them, perhaps TD should put up what Bill had to say. Orszag still subscribes to, at least from this interview, the "balanced" approach to solving the issues at hand and getting rid of all post 2000 tax cuts and taking payroll tax down by 3 times the current break of 2% in effect by the debt brotha administration until employment rises. For that I think he is off track, just kill the MIC and WIC (welfare industrial complex) and problem solved overnight, he looks too much like Milhouse from the Simpsons to take that seriously.

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watching Oriole Morrison on CNBC; one of the better blonde bimbos on financial TV; luv that Aussie accent. Some guy from Oxford (no less) just said all the politicians worldwide did not have the confidence of the people. DUH!

When there is news to report Zero Hedge is there, no matter what the time in NY, LA or Frankfurt. Must have a staff of 200 at least. :)

So far all I have heard from our govt. is whining, like little children. To hell with the rating. Lets get to work and fix this once mighty country. Re-election is not important, taking the right track is primary for our children, for those over 55 probably too late. Congress will now work together, take pay and expense cuts, remove our troops from all foreign countries, immediately work on a long range plan for the future to not only balance the budget but pay back the 17 Trillion we will owe by Christmas 2012. Glass steagal will be back in force as banks will just take in deposits, and loan on a safe ratio.

Obama will eliminate all subsidies for housing, prosecute the banks and mortgage brokers for the fraud they committed and earn the respect of Americans again.

Shortly after all this is initiated I fully expect Obama, Geithner and The Bernank to resign. Faith in the country will rebound, small business owners will slowly begin hiring, unemployment will drop and the country after paying the piper who is now impatient will prosper. And we can finally sell our gold.

And what rate of GDP was calculated into the "debt ceiling" deal? 4% - 5%? If we're going double dip right now, then wont tax revenue be such a huge miss to the downside in their models that the "ceiling" will probably have to be revisited right after the Big O is routed out of office?....just asking

Since the shit is hitting the fan anyway why doesn't the US Gov bring all the Freddie & Fannie May debt on to the books. That's about $7 Trillion right? Plus add in the amount "borrowed" from the state pension funds, another $400 billion odd right? That would bump up the official debt number to a nice round $22 Trillion.

They need to admit to themselves that it's that bad! Then they can start to address the problem. As you say to alcoholics, first you have to admit you have a problem, right? Obama, congress, senate are all still in denial.

Orzag the genius -- I remember when the lying sack of shit was the head of the CBO and said there was less than 25% chance that the bailout of Fannie and Freddie would cost as much of $50bln. Based on the stellar perfomance of shamelessness he was offered the job of Bush's budget chief.

Of course he would, he's a huge fascist. But the numbers don't lie. But it serves his purpose, so nothing unexpected here.

Everyone knows of the bs in obamacare? You know the wall street bullshit used to determine whether treatements should be done. CER and QALY? Well those are his babies.

He's all about cutting in his fascist ways. My guess is this is his way to push for more of his style of fascism. Or a poke at the administration saying, 'see should of used my fascist austerity measures in a bigger way'.

He's a fascist. But again, I'm not saying he's wrong about his estimation of the numbers, just saying, it's aligns himself with his goals.

It is rather amazing so few people seem to "get it". The relevant facts and bottom line is trivial, so let's lay it out for all to see.

#1: The federal government of the USSA has a printing press, and the federal reserve (its partner in crime) can cause unlimited dollar-unit credits to appear in the accounts of its bankster owners and buddies. Therefore, there is inherently zero chance that the USSA won't pay interest or principle on its bonds unless the federal government itself is disbanded by the states (as it should be). Anyone who measures "rating" simply as "probability the interest and principle on bonds will be paid" must rate federal debt strictly on the basis of the probability they will still exist at the time the bond in question will expire.

#2: Like every single fiat currency in the history of the universe, the value of the dollar measured in real, physical goods is falling, and falling fast. Therefore, anyone with half a brain would want to know whether the value of the interest and principle he receives on a bond he purchases will have [how much] greater or lesser value (in real, physical goods) than his investment.

If the received value is more than the investment, the investor earned a profit.

If the received value is less than the investment, the investor suffered a loss or haircut or default. Sure, you could say the default was a partial default if you want to, but it is in reality a default, for the creditor failed to return even the original value loaned to him.

The above is the entire story concerning the rating of the USSA. Unfortunately, S&P is basing its rating entirely or almost entirely on the basis of theory #1, and the downgrade is based upon the very real possibility that the federal government of the USSA shall cease to exist, exactly as that other "evil empire" of 40 years ago ceased to exist (the USSR). And make no mistake, especially given the FACT that the USSR ceased to exist, anyone who claims it is impossible that the USSA will cease to exist in the near future is precisely as stupid or disingenuous as TimmyBoy was to claim "the debt rating of the USSA will never be lowered".

However, what S&P and everyone else who wishes to be honest should do is to formulate their ratings on the basis of both #1 and #2, because they are both very relevant considerations. In fact, in this case, #2 is even more relevant, because whether or not the USSA manages to exist for another 30 years to pay off its 30 year bonds, the value they will repay for those debts will be massively, enormously, astronomically less than they received.

Not one single entity who buys a bond from the federal government of the USSA will earn a profit as measured in real value, not even 30 day debt. And any entity who buys a 30-year bond from the federal government of the USSA will be utterly wiped off the face of the earth, financially speaking.

Thus, on any honest analysis, the debt of the federal government of the USSA is vastly lower than "junk".

These are men of dishonor. They will turn on each other. Obama thinks he's playing us, when in fact it will be revealed that he is the biggest patsy in the biggest epic cluster fucking farce in history. This is why Ampex sends out popcorn.